In the world of fashion, trends seem to change on a daily basis, making it difficult for the companies trying to keep up with the changing preferences and stay ahead of the competition. It can also make for an exciting (and sometimes nerve-racking) ride for investors.
In the past year, Motley Fool Stock Advisor pick bebe (NASDAQ:BEBE), which targets young women, has traded between $13 and $31 per share. And it's hardly alone. There is a plethora of clothing retailers suffering a bit of nausea from roller-coaster-like rides, including Abercrombie & Fitch (NYSE:ANF), Aeropostale (NYSE:ARO), and Wet Seal (NASDAQ:WTSLA).
|
Ticker |
52-Week Low |
52-Week High |
Current |
|---|---|---|---|
|
ANF |
44.2 |
74.1 |
60.7 |
|
ARO |
18.1 |
35.5 |
30.5 |
|
WTSLA |
3.1 |
7.0 |
5.7 |
Based on its latest earnings, bebe's ups and downs will likely continue. For its fiscal third quarter, the company posted an earnings increase of 20% to $13.3 million, or $0.14 per share. Sales were up 13.6% to $132.8 million, and same-store sales grew by 4.7%, which may not seem like much of an accomplishment until you realize the company improved on last year's 28.5% gain.
Based on results like that, you might expect a steady ride up, but instead the stock fell nearly 7% in after-hours trading. I'd wager that had something to do with bebe's projections for the next quarter, and the fact that it will likely be difficult to improve on or meet year-over-year comparisons (particularly given recent strength in comps). bebe expects earnings per share to be $0.18 to $0.22 in its fourth quarter. That puts it either below or just above the $0.21 it earned in the year-ago period, and a notch short of the average analyst estimate of $0.23 per share, based on generally accepted accounting principles.
With bebe, and other retailers in its category, I wouldn't be too concerned about the month-to-month or even quarterly gyrations. And thought it's difficult to determine what the future holds, I wouldn't worry too much about estimates; bebe has a history of satisfying its investors. Its growth remains strong, and it's still doing well at its existing locations, as demonstrated by its continued comps growth. I believe those willing to go on a potentially wild ride will be thrilled with the experience.
For more on the changing trends of retail:
Since Tom Gardner recommended it, bebe is up by a hearty margin. Get more of his and his brother David's picks with a subscription to Motley Fool Stock Advisor by signing up today for a free 30-day trial.
Fool contributor Mike Cianciolo doesn't own shares of any company in this article.
